Do you think housing prices are STILL going down in California? (Santa Ana: how much, income)

[esteban91075]

Originally Posted by motoman

What are you talking about Charles? Home prices never fall. Buying a home is always a good investment. Stop believing the hype.

Funny. "Prices will never fall to $400,000...to $300,000...", the naysayers said. And they were right. Some are selling in the $200s. Oops.

In fact, I believe I remember some posters somewhere around here saying just a month or two ago that prices would never get down to $300,000. Well, at $339,000, we're already pretty damn close, and we still have a way to fall.

I've been saying for a while now that the median price should be in the $300,000-$350,000 range, and we're there. Ohhhh noooo, prices will never get that low. Haha! I'm sorry, I have to keep saying that. Haha!

"Through the floor" said the caption on The Economist graph.

Kudo's to you Motoman. I believe you deserve this vindication. I've been lurking on this board for more than two years and I've seen you take the contrarian opinion in the middle of the housing hysteria. I remember all the flack you received by posting a well thought out opinion that did not support the masses popular ideas. At the time everyone wanted to keep their rosey glasses on and ignore the factual data and market indicators.

I moved to socal at the height of the housing craze from Dallas, Texas and it absolutely made no sense to me. I agreed with your point of views and I remember all the naysayers saying that SoCal values will never fall because it was in so much demand. I couldn't make sense of it as my family was making close to $200k at the time but could only afford a crappy house in the ghetto or a crummy condo in a decent neighborhood.

Your point of view was always well thought out and logical given the available data at the time and common sense. Most of the counter arguements hinged on some real estate rule of thumb like "housing values only go up", "Nicer communities never loose value", "Income doesn't matter". These counter arguements were always based upon the popular conventional wisdom without a deeper understanding of how the financial fundamentals of the housing market works.

I believe that you should enjoy this moment given all the pressure you took to maintain and support your opinion.

Bye the way, So Cal housing prices will fall further. Housing prices can't be supported at a level where only 10% of homes on the market are affordable to the median income population. That just doesn't make sense.

[prim2007]

Originally Posted by esteban91075

Kudo's to you Motoman. I believe you deserve this vindication. I've been lurking on this board for more than two years and I've seen you take the contrarian opinion in the middle of the housing hysteria. I remember all the flack you received by posting a well thought out opinion that did not support the masses popular ideas. At the time everyone wanted to keep their rosey glasses on and ignore the factual data and market indicators.

I agree. Motoman has provided some good insight and information and it's done without all of the obnoxiousness, mean-spirited bravado that defines another forum board that I won’t name. I'm just glad to see we can have a civil discussion on this topic which can get as emotional as the 2008 presidential election so kudos to our moderators as well.

[karkyco]

A little birdy sent this my way this morning:

http://www.library.ca.gov/crb/08/08-006.pdf

Direct from the California Reseach Bureau, it's quite a grim assessment of the "Foreclosure Crisis". The senior economist and research specialist who came up with it is projecting 3-7.8% of all homeowners with mortgages will "be affected by foreclosure" by 2009.

Specifically, see the chart on page 5, outlining the estimated foreclosures resulting from subprime loans. I personally think it's being overly optomistic. Not only that, it doesn't even take into account the "prime" option or Alt-A ARM loans.

Subprime loans made up abour 25% of loans in LA County for 2005-2006. I believe the records indicate that prime Alt A or Option ARMs also accounted for a huge percentage of the loans through 2007.

[Charles]

"Today, median home prices are 3.5 times the size of median annual family incomes. This may be down from the recent peak of 4.2 times incomes reached last year, but it's way above the 2.8 times that home prices averaged during 1984-2000, when lots of homes were bought, sold and built.

And if you think 2.8 is low, check out the early 1970s. That was when home prices were only 2.3 times median family incomes, and housing was selling like gangbusters."

from

Millionaire Mommy Next Door: How low must housing prices go before families can afford to buy?

[karkyco]

Yeah but the excerpt's stats are for the overall US market. Los Angeles has been so far out of whack it's not even funny, with the ratio at over 13 times at the peak. Now it's around, what, 9 or 10? Still has a long way to go.

[sheri257]

Originally Posted by motoman

In fact, I believe I remember some posters somewhere around here saying just a month or two ago that prices would never get down to $300,000. Well, at $339,000, we're already pretty damn close, and we still have a way to fall.

You're still tooting your horn and rambling on about this stuff?

As I recall we were talking about LA ... not the entire state.

The average LA price is $422,000 as of May.

I actually don't remember anybody arguing that the average statewide CA price couldn't get down to $300K. You're kinda taking the previous discussion out of context.

Southland home sales still ultra-low; median price slips again

[prim2007]

Originally Posted by sheri257

You're still tooting your horn and rambling on about this stuff?

As I recall we were talking about LA ... not the entire state.

The average LA price is $422,000 as of May.

I actually don't remember anybody arguing that the average statewide CA price couldn't get down to $300K. You're kinda taking the previous discussion out of context.

Sheri, Motoman is tame compared to a group that's actually saying homes may be worth nothing, just the land. Unfortunately, I can't post the link to this competitor forum. Anyway, I do think prices will continue to fall in L.A an additional 10-15%.

[Sorcerer68]

I'm in the biz so I'll keep this short. Crapolaville homes have fallen at unbelievable rates. Check out Long Beach and the IE for those kinds of deals. In the nicer parts of town, it literally depends on each market and what month it is. City of Los Angeles itself is huge and can't be taken as a whole because you'll lump in Bel Air with Lincoln Heights.

Many more ARM loans will reset between now and September. I know, I have the list....however interest rates are starting to go up and factoring in other economic factors, they will most likely keep going up.

Areas like San Marino, South Pas and some other nice areas have barely go down or not at all. A nice, well-priced home will still sell for top dollar in South Pasadena in about a week. By contrast, neighboring Highland Park has 36 months of inventory.

Moral of the story: when talking housing disaster, know what area you're talking about. If two 2008 Mercedes are sold, one for full price of 78,000 and the other at an impossible price of 10,000, your average is 44,000.

Here's the situation brewing: Some homeowners took all their equity out at the top of the market and used it for things like luxury cars, expensive vacations, sending Skip and Lisa to USC...now the economy has taken a downturn and they can't afford their higher payments, nor can they sell their house because they got an inflated appraisal and the market went down in their area.

My tip for good deals: pre-forclosures. Sellers are desparate and will do just about anything. Short sales are the norm in this situation these days.

If you're under the gun of foreclosure or are about to be, look into loan renegotiation. I work with a company who can usually renegotiate to a 4.5 percent fixed (or less), get the outstanding balance forgiven (taxable as income) and get them back on the road, no foreclosure. Notice I'm not selling a specific company but please shop around.

[motoman]

Originally Posted by greggd

Did he sell to get out or did he just sell and move into the same area? I hear fullerton isn't as lilly as it used to be....................

I know a guy in Anaheim who sold to get out... he moved to Newport.

No, it was just luck of the draw for him really. He was living with his parents because they have health issues. But they wanted to move to North Carolina to be closer to their grandchildren. So they sold the house and he moved into an apartment in LA to be closer to work. Were it not for that they would probably still be in the house.

[BRinSM]

I found this interesting article relating to what Sorcerer68 was saying. http://www2.standardandpoors.com/spf...s_collapse.pdf

Take a look at the last page and see the map of the LA area. It pretty much sums up the fact that real estate can have submarkets within the same region and that location is currently the driving force in the our market.

I know that we will see more price declines in the more wealthy neighborhoods in LA, but I highly doubt that they will be as significant as those in the IE and AV as people are being forced to live closer to work because commuting such great distances is becoming cost prohibitive.